The market took a dim view of the recent results from United Parcel Service (NYSE:UPS), but there are reasons to believe it was a harsh judgment. In fact, UPS demonstrated progress on a number of initiatives, and little has changed with the investment proposition. In other words, if you liked UPS stock before the earnings report, there wasn't much in the results to change that view. Let's look at developments and why the market is beating up UPS unfairly.

UPS disappoints the market
The first-quarter results were lighter than analysts expected in terms of revenue and earnings per share (EPS). It gets worse. The second-quarter guidance for EPS growth to be flat against the same period last year left investors unimpressed. And it raised questions as to whether management was wise to reiterate full-year guidance for adjusted EPS of $7.45 to $7.75.

Moreover, total adjusted operating profit declined in the first quarter, with only the smallest segment (supply chain & freight) reporting a significant increase in profit. Is it time to throw in the towel?